[Anonymous]

Becker Question – Could someone help me out with the JE’s for this question? For some reason, I’m not comprehending the JE’s for this question.

Cap Corp. reported accrued investment interest receivable of $38,000 and $46,500 at January 1 and December 31, respectively. During the year, cash collections from the investments included the following:

Capital gains distributions $145,000
Interest 152,000

What amount should Cap report as interest revenue from investments?

These are the JE’s that I wrote down:

1/1:

Interest Receivable 38,000
Interest Revenue 38,000

Cash collections during the year:

Cash 38,000
Interest Receivable 38,000

12/31:

Interest Receivable 46,500
Interest Revenue 46,500

Do I need to assume that $114,000 (rest of the cash collected amount) was accrued to interest receivable and interest revenue during the course of the current year?

Interest Receivable 114,000
Interest Revenue 114,000

Cash 114,000
Interest Receivable 114,000

Also, do I need to assume for this question that they want to know the interest revenue recognized during the CURRENT year? I understand that the $38,000 of interest revenue was recognized last year. Interest revenue recognized for the CURRENT year would be (114,000 + 46,500 = 160,500), but do we need to make this assumption?

Thanks so much!